FHFA Moves to Cut Down on Interest Rates to Reduce Payment

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The Federal Housing Finance Agency has concluded to allow debtors with insured mortgages to cut down on their rates to pay lower amounts. Freddie Mac and Fannie Mae mortgages borrowers can now make lower payments without losing their homes.

The FHFA Loan Modifications Applies to Borrowers with a Low Loan-to-Value Ratio

The pandemic affected the housing market, causing home prices to skyrocket. Borrowers who opted for house financing through government-backed mortgage lenders found it difficult to pay back as at when due. As a result, the borrowers lost their homes to these mortgage lenders.

However, the recent news of a reduced interest will help cushion the effects of the Covid on housing. In addition, the FHFA modified loan regulations concerning borrowers with a low loan-to-value ratio. Applicants with a low ratio of below 80% can also reduce their interest.

Before now, only applicants with above 80% loan-to-value ratio were eligible for decreased rates. Thankfully, the move by the FHFA can help more loan applicants retain their homes and prevent foreclosures in these “unusual times.”

The newly appointed Director of the Agency Sandra Thompson explains that the objective for the modifications is to allow everyone to become eligible for decreased rates to prevent foreclosures and make homeownership a dream come true for them as they deal with forbearance.

The Agency’s move is one amongst many other policies that plan to improve home retention. Several other bodies are looking at ways they can help debtors and loan applicants mitigate the effects of the Covid-19 and prevent needless forbearance.

Speaking of aiding debtors, Ginnie Mae had already stated that it would provide 40-year long-term loans to borrowers to make loan payments more convenient. In addition to that, the Consumer Financial Protection Bureau has laid a roadmap for safeguards – mortgage servicing regulations to help borrowers’ forbearance.

More Policies On the Way to Mitigate the Current Economic Situation

Ginnie Mae’s 40-year long-term loans plan, the CFPB, and the FHFA’s rate reduction is just some of the policies that will improve homeownership and cushion the effects of the hardship posed by the pandemic. We expect more federal policies to prevent house loss, give debtors more time to pay up their loans at a reduced rate, and also save up for the future.

Visit The Power Is Now Media, Inc. and read/watch more real estate and mortgage news, videos, and information on current developments in the real estate industry on Facebook Live and our YouTube channel. The Power Is Now Media, Inc. is leading the conversation in real estate.

The Power Is Now Media is an online multimedia company founded in 2009 by Eric L. Frazier, MBA, and is headquartered in Riverside, California. We are advocates for homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. The Power Is Now Media corporate office is located at 3739 6th Street Riverside, CA 92501. Ph: 800-401-8994 Website: www.thepowerisnow.com.

Published by Eric Lawrence Frazier, MBA.

Photo source: https://www.wealthmanagement.com/multifamily/fhfa-continues-lay-groundwork-gses-exits-conservatorship

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